Global oil giant Shell has announced it will not be going ahead with two biofuel and base oil projects it had proposed setting up in Singapore, Reuters reported a company spokesperson as saying.

“We can confirm that we are stopping the exploration of two projects – a biofuels unit and a Group II base oil plant in Singapore,” the company told Reuters in an e-mailed statement on 30 March.

“We will continue supplying base oil and lubricants, as well as biofuels, to our customers in Singapore and the region.”

Shell announced in late 2021 that it was studying a 550,000 tonnes/year project at Singapore’s Bukom Island to produce sustainable aviation fuel (SAF) to supply major Asian hubs such as Hong Kong International Airport and Singapore’s Changi, the report said.

The company had planned to make a final investment decision for the project, which would have the flexibility to produce renewable diesel and bio-naphtha feedstock for petrochemicals, by early 2023, Reuters wrote.

Unlike Europe and the USA, there is no mandate for airlines to use SAF in Asia, an industry source said, adding that customers there were not willing to accept higher costs for the fuel.

Shell was building a 820,000 tonnes/year biofuels plant in Rotterdam, the Netherlands, and had targeted to make about 2M tonnes/year of SAF by 2025, the report said.